In the U.S., much of the energy dialogue has been around the inherent risk in depending on other countries to meet its energy needs. But, in Luxembourg – a country that imports essentially ALL of its energy supply – “energy security” takes an even more prominent role. According to a new report by the International Energy Agency (IEA), the country has a unique opportunity to become a global leader in the implementation of conservation, efficiency, and climate change mitigation activities.

In its new report, Energy Policies of IEA Countries – Luxembourg 2014, the IEA notes that, in part due to its small size, this country has the unique ability to implement conservation, efficiency, and grid 2.0 efforts (e.g. electric vehicles, distributed generation) on a national level. According to the IEA’s Executive Director Maria van der Hoeven “Luxembourg has the possibility to do something no IEA country has done, which is to combine smart grids and electric vehicles at country-wide level to create a smart energy and transport network.”

With a total population barely topping half a million people over 992 square miles, Luxembourg’s total land area is about 20% smaller than Rhode Island (at 1212 square miles). The country consumes about 0.194 quadrillion british thermal units (quads) of primary energy each year and produces 0.003. In comparison, the United States consumes about 97 quads of primary energy and produces 78 quads each year (note: the US both imports and exports products including coal and oil).

Similarly to the US, and unsurprisingly given its dependence on fuel imports, Luxembourg has taken a closer look at its oil stockpiling strategy in recent years. The country has also worked to improve its power grid interconnections with neighboring France and natural gas grid connections with Belgium in order to prevent supply disruptions. According to the IEA:

Because Luxembourg imports all of its energy needs, energy security is a priority. Luxembourg has sought to address this through regional market integration. As neighbouring countries invest in ambitious energy transition policies, regional electricity trade and electricity markets are changing. Luxembourg is set to increase its interconnections. Therefore, it is both a necessity and opportunity to support competitive electricity markets and increase co-ordination of system operation, including the pooling of regional reserves and flexibility to meet demand peaks.

In terms of environmental topics, Luxembourg has instituted a environmental tax dubbed the “Kyoto cent” in accordance with its greenhouse gas emissions targets under the Kyoto Protocol (for the 2008-2012 commitment period, Luxembourg took the highest commitment levels of the European Union member states). The environmental tax is the primary funding source behind the nation’s Climate and Energy fund and is meant to offset the emissions associated with the large number of tourists and travellers passing through the country.